L&D Best Practices: Tuition Reimbursement

Training magazine taps 2012 Training Top 125 winners and Top 10 Hall of Famers to provide their learning and development best practices in each issue. Here, we look at strategies for tuition reimbursement and professional designations.

Article Author:

Lorri Freifeld

Tuition Reimbursement

By Jamie Leitch, Director, Career Development & Training, American Infrastructure

One of American Infrastructure’s core beliefs is the continuous development of our employees. Our organization is so committed to this belief that our award-winning Continuous Learning Center was established with the sole intent of providing our employees with the opportunity to grow, excel, and succeed. To support this effort, American Infrastructure purposefully redesigned its Tuition Reimbursement Program to both promote and reward employment, engagement, and productivity.

Prior to this redesign, our traditional Tuition Reimbursement Program encouraged our employees to seek out only external educational programs to support their career development. We felt positive about the ability of our Tuition Reimbursement Program to contribute to our employee value proposition because our annual employee surveys consistently indicated employee satisfaction with this program. At the same time, however, our internal metrics indicated that program utilization, employee engagement, and employee productivity did not significantly increase as a result of this program. In an effort to analyze this dichotomy, our organization decided to review the success of our Tuition Reimbursement Program as it related to the Total Rewards “Exchange Relationship” that we wished to maintain with our employees.

Within a proper Total Rewards “Exchange Relationship,” our employees should desire to offer our organization their increased time, effort, and performance in exchange for rewards that are valued by them. Through extensive employee discussions and analysis, our organization discovered two critical factors about our traditional Tuition Reimbursement Program that were negatively affecting this relationship. First, the perceived value of this program, when specifically measured, was very low. We wanted our employees to be engaged and inspired by this program, not merely satisfied with it. Second, our employees were unclear as to how their education would contribute to their continued career development within our organization. We needed to implement a solution designed to link new knowledge gained from employee educational opportunities to employee development and employee/organizational productivity.

With the assistance of our employees, American Infrastructure has accomplished these goals. Our new Tuition Reimbursement Program not only rewards but promotes continued employment, engagement, and productivity. All of our employees have access to both tuition reimbursement and to tuition prepayment opportunities as part of this program. Our program supports degree-seeking, non-degree seeking, and even non-traditional educational opportunities. Our employees do not need to remain employed with our organization for any specified length of time to be eligible for our prepayment educational opportunities. However, to remain eligible for education reimbursement, employees must remain employed with our organization for up to one year after program completion. The only requirement for all educational opportunities is that they must be related to employee career development and organizational business objectives. Most importantly, our new program rewards our employees with increased educational opportunities the longer they remain productively employed within our organization. Through the use of our personalized Career Development Roadmaps, employees and their supervisors work collaboratively to link employee educational opportunities to employee development and employee/organizational productivity. As an example of this process, one of our project engineers obtained an MBA and now is functioning as the head of marketing intelligence for our organization.

Our current employee satisfaction survey indicates that our employees are extremely satisfied with this program. Program utilization increased by 170 percent between 2010 and 2011. As an added benefit, American Infrastructure is more confident that our employees will not leave our organization and apply their new knowledge gained from education programs to the benefit of any of our competitors. Within the last three years, 93 percent of the employees who have participated within our Tuition Reimbursement Program have remained employed with our organization and have increased their annual productivity contribution (a function of key business results and performance) over prior years.

TIPS

For anyone wishing to redesign their Tuition Reimbursement Program to be an effective tool to both reward and promote employment, engagement, and productivity, it is crucial for you to ensure that your program is:

Flexible: Include various types of employee educational opportunities within your program (degree-seeking, non-degree-seeking, non-traditional, etc.) as they support your business goals.

Far Reaching: Design your program to support employee career development throughout the entire employee lifecycle. Make sure there is a supportive link between your program and employee/organizational productivity goals.

At American Infrastructure, it has been our experience that a Tuition Reimbursement Program that incorporates these three factors will enable employees to build the road to their productive future.

Tuition Reimbursement & Professional Designations

By Mary Beth Alexander, Assistant Vice President, Organizational Development and Corporate Marketing, The Economical Insurance Group

In our culture, learning never stops. Learning is one of five core values that support the mission and vision at The Economical Insurance Group. Learning is closely aligned with strategic goals and organizational priorities. Like many organizations today, we are faced with the ongoing challenge to expand our talent capacity to develop next-generation leaders. Our tuition reimbursement program has helped us achieve success by inviting employees to take ownership of their ongoing development.

As one of the leading property and casualty insurance companies in Canada, Economical maintains a robust tuition reimbursement program illustrated by the increasing number of requests processed annually. To encourage and support the development of specialized skills and knowledge related to the insurance business and other technical, job-related areas, we recognize and promote the benefits of external education. Employees are eligible to apply for reimbursement of tuition and course material fees, as well as examination fees. We also provide financial assistance for approved formal education. University and non-industry-specific education and development fall under this category. Typically, these programs cover business diplomas; bachelor degrees; actuarial studies; and occasionally for executives, MBA programs. To keep up with industry developments and trends, many of our employees also maintain memberships with professional associations and technical institutions.

In Canada, the insurance industry is highly regulated, and, therefore, attaining professional designations and maintaining those designations is a priority. This is modeled through the actions of our president and CEO, Karen Gavan, who actively maintains both her CA and ICD.D designations by participating in ongoing professional development.

To recognize employees who pursue higher education, we provide financial rewards based on the certifications that are achieved. Guidelines were created to provide consistency across the company with clear goals established at inception to ensure long-term success. We know sound measurement against these goals supports achievement, and as a result, we track several metrics related to the bottom-line impact of our tuition reimbursement program. For example, 550 current employees have earned their Chartered Insurance Professional (CIP) designation, and we have 850 employees who have successfully completed one of the 10 courses toward the designation. This continues to rank our completion rates in the top three out of all general insurance companies in Canada. The CIP program integrates practical and theoretical knowledge and consists of 10 courses: five mandatory, three applied professional, and two electives chosen from more than 20 available courses. The premier designation of the industry, the Fellow Chartered Insurance Professional (FCIP), is an executive development program offered by universities whereby students are taught management-level techniques to solve complex problems and implement effective strategies in addition to high-level insurance information. To date, approximately 125 employees have achieved this distinction.

The promotion of tuition reimbursement programs both internally and externally is required. Our leaders encourage additional studies as a development opportunity and recognize graduates through reward and recognition programs. Our senior leaders continue to foster employee engagement by annually attending staff convocation ceremonies. Erika Palladino, team leader and recent graduate from the Toronto area, acknowledges the importance of leader support during the development process. “I would like to personally thank each of you for attending convocation on Thursday. I attended last year to support a member of my team, which, in essence, is a simple task, but now being the recipient, I am grateful to have such support,” she said. “Sometimes it takes the experience to remember how a simple act can influence others, and your dedication to come out to this function reminds me how our actions as leaders can inspire others.”

We support our employees in balancing work and school by allowing them time off to study, the option of telecommuting, or working flex hours during exams and deadlines. We were the first insurance company to offer on-site courses, which increased employee participation. To date, seven courses have been offered in this format, with 167 employees successfully completing the courses. Our course facilitator is an internal Economical employee voted instructor of the year by the local chapter of the Insurance Institute of Canada.

TIPS

So how does a company create and sustain a successful tuition reimbursement program? Economical has established strong partnerships with educational institutions across the country through financial support and serve as a key stakeholder in the creation and development of insurance programs at the community college level. We also promote tuition reimbursement to potential graduates, leveraging the program as a recruitment tool. Learning has always been an integral part of our Human Resources strategy, which is closely aligned to the talent management strategy.

Further, the tuition reimbursement program was adopted and is supported by every department in the company. It has clearly articulated guidelines and auditing practices. Defined policies and guidelines leave no room for misinterpretation on the part of employees and leaders. Part of our success has come with regularly reviewing those guidelines to ensure we are staying current with best practices and education trends.

Bersin & Associates, a research and advisory services firm in enterprise learning and talent management, offers a useful tuition assistance maturity model. This model differentiates companies at various stages of maturity in tuition assistance. Economical sits at the advanced level of this model.

While our tuition reimbursement program has proven to be highly effective, there is no “one- size-fits-all” approach when implementing and maintaining this type of program. Our experience has shown that supporting and encouraging continual growth with flexible work arrangements and financial assistance yields the most engagement and success.

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